Settlement Week might see higher volatility as crude prices also became volatile now!

On friday though the markets have posted gains at the end of the session, week on week indices have posted losses for the second week in a row, amidst volatilitly due to raise in inflation fiigures domestically. However, bulls ensured that July closing levels are held in margin. With US markets rallying on friday, as crude cooled to 114$ our markets will open in positive territory, which is indicated by 80 points premium on Singapore Nifty Futures currently. VIX closed at 35.76, and the day's 79.77 is the highest once again, to be viewed as an indication of return of higher volatile times, that too this being settlement week. Roll overs have to pick up from now on which also causes two way movement. As far as Nifty technical levels concerned 50DSMA was held last week, is the immediate support to be watched in case of weakness. The resistance can come this week at 20DSMA levels currently placed at 4414.19(Nifty) & 14685.06(Sensex) initially. However, 100DSMA level of 4587.55(Nifty) might not be cleared.

Asian markets are trading with gains. The range of Nifty for this week might be 4200 to 4600.

Strategy for the Day: Buy 4500 puts on rallies for intra day trading.

Note: Written on 25.08.2008 at 09.25 a.m.